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Moody's cuts Rinker to junk
Moody's Investors Service said it downgraded Rinker Material LLC's senior notes to Ba1 from Baa3 and kept the rating on review for possible further downgrade.
The downgrade was prompted by the ongoing softening of the company's end markets as well as its tight liquidity profile, the agency, and reflects the increased likelihood that Rinker's ultimate parent, Cemex, SAB de CV, may not be able to restore its liquidity and financial position to levels more in line with an investment-grade rating over the medium term.
The downgrade also incorporates Cemex's significant earnings guidance reduction in September, a high likelihood of continued performance pressures in several of Cemex's key markets and a weak liquidity profile because of continued material debt refinancing needs amid difficult credit market conditions, Moody's said.
The review for further possible downgrade will focus on Cemex's earnings and cash flow prospects as well as its plans to address near-term debt maturities and reduce financial leverage, the agency said.
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